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Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 6/97 AUSTRIAN AIRLINES: LIGHT AT THE END OF THE TUNNEL by Heiko Reuter Patience has become a tradition for the stockholders of Austrian Airlines (AUA). The company has not paid dividends since 1991, as will be true for 1996. An "economically extremely difficult environment" with decreasing revenues and approximately DM16 million higher costs due to increased fuel prices has spoiled the plans of AUA's management. 1997 is to be the year of change. AUA's Managing Director Herbert Bammer is forecasting a financial breakthrough for the airline's operational business, the operational and strategical ways of the joint venture are already pointed at the future. Based on AUA's participation in Lauda Air, Bammer hopes to be able to improve the company result by 21 to 29 million Marks per year. Eleven working groups are planning the joint effort of the two former rivals, the goal being to eliminate double capacities and reorganize the two airline's flight schedules. It is almost sure that Lauda will loose several business routes to AUA. According to the strategists from Austrian Airlines, Lauda will mainly serve touristic destinations in the future. Forecasting a further decrease in yields, AUA's management is putting massive pressure on its own company to reduce the costs by 20 percent until 1999. AUA has already succeeded in reducing the part of the personnel costs in the operating costs, from 30 percent in 1988 down to today's 24 percent. Measured in offered ton-kilometers per employee, the productivity of the airline's employees has increased by 36 percent in the past two years. Austria's national carrier seems to be on the right course. Meanwhile, AUA's alliance partners, first of all Swissair, are suspiciously monitoring the airline's activities. By acquiring a share of Lauda, AUA has kept a back door open to the Lufthansa concern. Still, AUA's management is currently denying a turn towards the German airline, saying that there is only a selective cooperation with Lufthansa, including the maintenance of the new Airbus A340-300 at Lufthansa's facilities and few code-sharing flights. No reason for disagreement between AUA and its alliance partners? "We are obliged to succeed" is the motto that can be read in AUA's most recent annual report. However, currently there is no upwind discernible at its partners Swissair and Sabena. From page 24 of FLUG REVUE 6/97 Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 6/97 Copyright 1997 by Motor-Presse Stuttgart. All rights reserved. Last updated May 7, 1997